I think the thing is M$ got all their contracts wrong, they probably set fixed prices for the components which seemed good in the first instance, but as time went on they wanted to drop the cost they may have had no contractual agreement that their partners would drop their price. Every component from a 3rd party you seem to hear the same thing, it cant all be bs. The thing is with hdds although we can now get much larger ones for the same price, really they have the same components, its how the data is written to the platters thats getting more advanced, that dont just double the qty of platters every time they double the size. So if the drive is only 10 gig that don't mean it costs a tenth of a 100 gig drive to make, these two factors probably put them off sticking hdds in as they knew they would never really be able to cut the drive cost as its a fixed (ish) amount, only the size goes up but the end of the day the manufacturing costs are pretty constant, and as they dont make them they cant leverage price reductions as easily.
But what that statement also says is how they rushed head long into the 360, and we all wondered how they managed to release a system with such widespread heat issues, there you have it they couldn't afford it whilst buying drives in at $70, and they didnt test long enough to see it coming as most 360s last for a while, they probably saw a few die off early and then they settled and thought great we nailed it, released to the public for a mass test on a scale they never did and whack the the turds start hitting the fan.